Proposed IRS action

As Andrew Bowman expressed during his speech at Rally last week, we face significant reputational risk if we do not address the fact that people are using conservation easement donations to make substantial profits on land held for only a short period of time.

The Land Trust Alliance issued an advisory about these transactions in August, and the current discussion draft of the revised Land Trust Standards and Practices includes parallel language to help Alliance members avoid these transactions. In addition, we asked the IRS to issue guidance about these transactions and for Congress to get involved if necessary.

Last Sunday, at Rally, the IRS did just that. Karin Gross, supervisory attorney in the IRS Office of Chief Counsel, speaking in a session on conservation easement appraisal issues, announced that the IRS will issue by the end of 2016 a notice on abusive conservation easement transactions. We are not certain what form that guidance will take, but the Alliance will do all it can to ensure both that this has a chilling effect on abusive transactions and that it does not discourage legitimate ones.

In addition, the IRS is beginning a new regulatory process on conservation easement amendments. This is a new process for the IRS, one on which they asked for our input. The Alliance will continue to defend land trusts’ ability to amend conservation easements, in this process and in the courts.

Overall, we are encouraged by action by the IRS, but we will work to ensure the best possible outcome for land trusts and for conservation.

Wendy Jackson is the executive vice president at the Land Trust Alliance.